Insurance bad faith occurs when an insurer unreasonably refuses to pay a valid claim — or delays payment without justification. Georgia law under O.C.G.A. § 33-4-6 gives policyholders real tools to fight back.
What Georgia’s Bad Faith Statute Provides
Under O.C.G.A. § 33-4-6, when an insurer refuses in bad faith to pay a covered claim, the policyholder may recover:
- The full amount owed on the underlying claim
- A bad faith penalty of up to 50 percent of the covered loss
- Reasonable attorney fees incurred in pursuing the claim
These additional recoveries — beyond the underlying claim value — are designed to deter insurers from using delay and denial as a financial strategy against policyholders who cannot afford years of litigation.
The 60-Day Demand Requirement
Before filing a bad faith lawsuit in Georgia, you must make a written demand for payment and give the insurer 60 days to respond. This is a procedural prerequisite — skipping the 60-day demand forfeits the bad faith claim even if the insurer’s conduct was clearly unreasonable. The demand letter must identify the covered loss and the basis for the claim with sufficient specificity.
Common Bad Faith Scenarios in Georgia Accident Cases
- Your UM/UIM insurer delays investigation beyond 60 days without reasonable cause
- An insurer makes an offer so inadequate it reflects bad faith rather than genuine negotiation
- An insurer denies a claim without conducting a reasonable investigation
- A liability insurer fails to tender its policy limits when a claim clearly exceeds them and a reasonable opportunity to settle within limits was given
First-Party vs. Third-Party Context
The O.C.G.A. § 33-4-6 penalty statute applies primarily to first-party claims — your claims against your own insurer. Third-party bad faith (against the at-fault driver’s insurer) is handled through a separate Georgia doctrine where the insurer’s failure to protect its insured from an excess judgment creates liability. Both theories are available depending on the facts of your case.
The Strategic Value of Bad Faith Claims
The threat of bad faith liability — and the 50 percent penalty — gives Georgia accident attorneys significant leverage in UM/UIM negotiations. Insurers who understand they face penalty exposure have a strong financial incentive to resolve claims reasonably and promptly.
A free Georgia accident evaluation includes analysis of whether your insurer’s conduct may give rise to a bad faith claim. Call today.